[Click eStock] "International Oil Prices Rise Again... OCI Expected to Improve Profitability"

Korea Investment & Securities on June 9 maintained its target price of 140,000 won for OCI, designating it as the "top pick" in the refining and petrochemical sector. The company expects profitability to improve, citing the heightened possibility that international oil prices could remain strong above $100 per barrel, as the conflict between the United States, Israel, and Iran intensifies.

Lee Chungjae, a researcher at Korea Investment & Securities, stated in a report on this day, "Due to expectations of a ceasefire, the refining and petrochemical sector suffered weak profitability in May amid falling oil prices, but profitability has been improving rapidly in June." On June 8, as Iran and Israel exchanged attacks, the international community has increasingly assessed that the possibility of a short-term ceasefire agreement remains low.

Lee further commented, "If there had been even a slight possibility of a ceasefire agreement, Iran would not have attacked Israel," adding, "The probability is high that international oil prices will once again show strong momentum above $100 per barrel."

He also noted, "Operational disruptions at Asian refining and petrochemical facilities due to the Iran conflict are prolonged," and predicted, "The prices of BTX, TDI, and other products produced by OCI are expected to rise along with oil prices." Additionally, he observed, "As of July, the average second-quarter prices of Chinese coal tar pitch and carbon black, among others, are higher than in the first quarter," and forecasted, "Profitability is expected to improve in the second quarter."

The expansion of facilities by major customers is highlighted as a factor for improvement in the polysilicon division's performance. Lee noted that since 2012, OCI has been supplying semiconductor-grade polysilicon to SK Siltron, and that SK Group management has announced plans to double wafer production over the next five years. He assessed, "This will have a positive impact on sales growth in the basic chemicals business."

He said, "In 2026, revenue is expected to reach 2.3 trillion won and operating profit 180 billion won, a significant improvement over 2025. Amid escalating geopolitical uncertainty in the Gulf region, we recommend OCI as a top pick in the refining and petrochemical sector. We maintain our target price of 140,000 won and a buy rating." On the previous day, OCI's share price closed at 106,900 won.

This content was produced with the assistance of AI translation services.